ITC by invoice issued to jobworker.

[Jignesh Sitapara]

Dear Expers,

My one of client (jobworker) sent the material to another jobwokrer for another process on GOODS, Now, another jobworker issued Invoice to my Client. Then my client can take ITC against this invoice ?

Please help me.

[YAGAY and SUN]

Yes. In the given facts, the principal/job worker recipient may avail Input Tax Credit ("ITC") on the invoice issued by the subsequent/secondary job worker, subject to fulfillment of conditions prescribed under Sections 16 and 19 of the CGST Act, 2017.

Where goods are sent by one job worker to another job worker for carrying out an additional process/treatment on behalf of the principal, such movement is permissible under Section 143 of the CGST Act read with Rule 45 of the CGST Rules, without payment of tax, provided proper challan documentation and prescribed records are maintained.

If the second job worker has supplied taxable job work services and has issued a valid tax invoice charging GST upon the principal/client, the recipient is legally entitled to avail ITC of such GST, provided:

1. The recipient is in possession of a valid tax invoice;

2. The job work services have actually been received/utilized;

3. Tax charged has been paid to the Government by the supplier;

4. Returns under Section 39 have been duly furnished; and

5. The transaction is reflected in GSTR-2B/2A, wherever applicable.

Further, ITC eligibility is not barred merely because the goods physically moved from one job worker to another instead of returning to the principal before subsequent processing. GST law specifically permits inter-job worker movement for completion of manufacturing/processing activities.

Accordingly, subject to documentary compliance and genuineness of the transaction, the client/principal is entitled to claim ITC on the invoice raised by the second job worker.

[KALLESHAMURTHY MURTHY K.N.]

Sir,

ITC can be availed on subsequent job work service, provided the conditions in sec 16(2) of the CGST Act are fulfilled.

[Sadanand Bulbule]

I welcome the replies.

[Shilpi Jain]

No complications to this. if its all in respect of taxable supplies and other conditions in law are satisfied, credit is eligible.

Is there any specific reason why you have a doubt regarding credit eligbility?

AI Summary

Input tax credit on subsequent job work services depends on valid invoice, receipt of service, and statutory compliance. Input tax credit may be claimed on a tax invoice issued by a subsequent job worker for additional processing of goods, provided the recipient satisfies the general credit conditions under the GST law. Where taxable job work services are supplied and a valid tax invoice is issued, the principal or client may avail ITC if the recipient possesses the invoice, the services have been actually received and used, and the statutory requirements for tax payment and return filing are met. Movement of goods from one job worker to another for further processing is also treated as a permissible inter-job worker transfer, subject to challan documentation and prescribed record maintenance.